The present disclosure relates broadly, but not exclusively, to methods and devices for digital payment transactions.
Traditionally, payment cards such as credit or debit cards have a magnetic stripe on the back of the card. Information relating to the particular credit or debit card (such as account number, card expiry date, etc.) is recorded on the magnetic stripe. To initiate an electronic financial transaction using a payment card with a magnetic stripe, the card is swiped through a magnetic stripe reader that is communicatively coupled with a merchant's point of sale (POS) terminal.
Recently, proximity payment (also known as “contactless”) systems are becoming more popular. In addition to (or instead of) having a magnetic stripe, contactless payment cards have a radio frequency identification (RFID) chip and antenna embedded in the body of the card. Instead of swiping the payment card through the magnetic stripe reader at the merchant's POS terminal, the contactless payment card is brought into close proximity to a reader that is communicatively coupled with the merchant's POS terminal.
A consumer's mobile device with a suitable RFID chip and antenna (e.g. a smartphone, tablet computer, etc.) can be used as a proximity payment (“contactless”) payment device. The RFID chip stores payment card details to be wirelessly transmitted (e.g. via near field communication (NFC) protocol) to a reader that is communicatively coupled with the merchant's POS terminal.
However, many merchants do not have equipment for participating in proximity payment (contactless) transactions. That is, most merchants only have magnetic stripe acceptance systems. Implementing and installing proximity payment (contactless) systems is an extensive and costly undertaking by all stakeholders (merchants, financial institutions, etc.). As a result, consumers with contactless payment cards/devices are unable to benefit from the relative security and convenience associated with contactless payment schemes.
A need therefore exists to provide methods and system for digital payment transactions that seek to address at least some of the above problems.